The 2017 tax law passed by Congress redefined government grants to co-ops as income. The grants had previously been considered capital. That change makes it much more difficult for co-ops to stay within the 15% limit on non-member income that they must maintain to remain tax-exempt.
Co-ops now risk their tax-exempt status if they receive federal, state or local grants for disaster relief, rural broadband projects or other priorities. The RURAL Act, a bipartisan bill that would allow co-ops to once again accept grants without losing their tax-exempt status, would fix this issue. In the videos below, hear from co-op leaders on why passage of the RURAL Act is so vital for their communities.
Roanoke Electric Cooperative CEO and NRECA President Curtis Wynn
Mid-South Electric Cooperative CEO Kerry Kelton
Springer Electric Cooperative CEO David Spradlin